Real Estate Agents and Brokers
Real Estate – The Difference Between A Broker And An Agent
Just like any profession, the real estate industry provides for different levels of education and training. The qualifications received by any person working in real estate identifies the services they can provide and the functions that they can fulfill.
1. The Real Estate Agent
A real estate agent is the person you will probably deal with when you want to purchase or sell a property. This person can also be called a real estate salesperson and is required to receive a minimum of 60 hours of training and education. After they have completed the necessary classes, they need to pass a state and national exam when the will receive a real estate license.
A real estate agent can immediately begin providing services upon receiving their license. While it is not a necessary requirement, an agent should also be a member of the National Association of REALTORS. This means that they need to work by a set of standards and ethics and have the right to call themselves a realtor.
When choosing a real estate agent, it is advisable to select an individual who has some experience in the industry, rather than a person who has just been certified. However, if you choose a novice agent, know that they will be working under a real estate broker who can provide you with a higher level of expertise.
2. The Real Estate Broker
A broker is required to receive education in classes that are specifically aimed at broker training for a minimum of 180 hours. They will then need to pass a national and state broker exam at which time they will become qualified.
It isn’t necessary for a broker to complete the real estate training and exam. However, should they choose to do so, the education period and examination will be over and above the requirements to become qualified as a broker.
A broker can perform all the same functions as a real estate agent, but it is unlikely that you will have first-hand dealings with them. The broker normally employs real estate agents or runs their real estate agency. In some cases, the real estate broker may act alone in property sales and purchases. Your broker should also part of the National Association of REALTORS to ensure that you receive a specific standard of professionalism.
In any real estate transaction handled by an agent, the broker will have the following responsibilities:
– Deals with monetary deposits and escrow accounts.
– Manages and oversees the functions of the real estate agents working for them.
– Resolving any complaints regarding their agents.
– Ensuring that all transactions and contractual issues are correctly handled.
– Take overall responsibility for all the actions taken by their employees.
3. The Broker Associate
A broker associate has all the training, education and qualifications of a real estate broker but does not choose to run their agency or work alone. This is normally the case where a broker does not have the experience to go it alone and will work in a real estate agency to learn the ropes before establishing their agency.
The associate broker will probably work in the same capacity as a real estate agent but may fulfill some of the functions of a broker.
4. Real Estate Commissions And Fees
When you want to sell a property, you need to be aware of the real estate agent commissions and fees that you will need to pay. The commission can range anywhere from 5% to 8% of the selling price and will be deducted from any profit you make upon the sale of the property.
The real estate agent will receive a portion of the commission while the remainder will be paid to the broker. The agent and the broker will not receive any payment unless your property is sold or if they charge any additional fees. Additional fees could include:
– Admin Fees
– Property Valuation Fees
– Legal Fees
– Contractual Fees
– Transfer Fees
The greater the experience and expertise that you are likely to receive from a real estate agency, the higher the commission you will probably need to pay.